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Help for homeowners facing foreclosure

February 12, 2008 12:00:00 AM PST
Homeowners threatened with foreclosure would in some instances get a 30-day reprieve under a new initiative the Bush administration announced Tuesday.Becky Ault has seen neighbor after neighbor forced out of their homes due to mortgages they could no longer afford.

"There is about four people who live on this street that haven't been foreclosed on," said Becky Ault, a Corona resident.

Half of the homes in the Corona neighborhood are empty and more may be in foreclosure soon.

The federal government is hoping that a new program dubbed "Project Lifeline," will save thousands of homeowners from going under.

"This is an important new initiative targeted not only to reach subprime borrowers, but all 90 day delinquent homeowners," said Henry Paulson, Treasury Secretary.

The idea is to give troubled homeowners a chance to freeze their foreclosure for 30 days why lenders try to work out a way to make the loans more affordable.

Six major lenders are taking part in the pilot program. All types of mortgages are covered, but only homeowners who are 90 or more days overdue on their payments will qualify. It is a move many people hope will save their family and friends.

"I think there is a couple of people that I can think of that are kind of in that situation. So this might be buying some time for them," said Lisa Allan, a Corona resident.

"I think that many families want that help for the mortgage and for the bank," said Arturo Landeros, a Corona resident.

"I have a good mortgage. I am not in foreclosure, but whatever helps the economy keeps us out of a recession I am all for," said Brian Talbert, a Corona resident.

Analysts estimate that the number of foreclosures will surge to one million this year. The drastic jump will also effect home sales. In states like California, that has been hit by the mortgage mess, nearly all of half of home sales come from foreclosed properties.

In December, President Bush announced a deal brokered with the mortgage industry that will freeze certain subprime loans, those offered to borrowers with weak credit histories, for five years if the borrowers are unable to afford the higher monthly payments as those mortgages reset after being at lower introductory rates.

"As our economy works through this difficult period, we will look for additional opportunities to try to avoid preventable foreclosures," Paulson said. "However, none of these efforts are a silver bullet that will undo the excesses of the past years, nor are they designed to bail out real estate speculators or those who committed fraud during the mortgage process."

Eyewitness News reporter Leanne Suter and The Associated Press contributed to this report.

 

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